‘Strong appetite for AO.com driving value over £1bn’
ONLINE appliances retailer AO.com is looking at valuing its initial public offering at £1bn to £1.2bn – far more than originally expected, according to reports.
The high-growth Bolton-based company was originally looking for a valuation of £300m when it appointed corporate banking advisers in September last year, the Financial Times said.
The retailer, formerly known as Appliances Online, has excited investors amid increased interest among institutions for pure-play online businesses.
Aviva Investors fund manager Trevor Green told the paper that AO is a “standout” candidate among a wave of retailers set to come to market this year, which could include newsagents chain McColl, Pets at Home, Poundland, Card Factory, B&M Bargains and House of Fraser too.
Mr Green said: “There are going to be a couple of these companies coming to market, or maybe only one, where we really want to support the company long term and therefore look to take a meaningful stake.
“It’s about having an opportunity to really take market share, and build a presence in the market, and you can see that in AO.”
Another expert, Clive Black from Shore Capital, praised AO’s strong systems and high customer service standards, which he likened to those operated by fashion retailer ASOS – one of the Stock Market’s best-performing retailers.
He said: “We can see why there is a great appetite for try to get a decent bite-size chunk of AO if it comes to market.”
The company – founded by chief executive John Roberts – has not publicly confirmed its intention to float.
One North West business which has though is Manchester-based online fashion retailer Boohoo.com. The Dale Street-based company is expected to announce its intention to float in March for a market capitalisation of about £500m, City sources say.
